Rates Aren’t Coming Down Soon. But Stocks and Bonds Are Priced to Buy.

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The years of ultralow interest rates nurtured a variety of wacky investment ideas. That’s over now. Here’s our guide to some ordinary investments at...

Where have all the weirdos gone? Not two years ago in a cover story on the state of finance, I opened with a cowboy in his underpants serenading a Times Square duo in matching onesies about a holographic worm. He had been commissioned to raise interest in a particular nonfungible token. If you don’t know what those are, they’re unique, tradable, blockchain identifiers—contrived digital scarcity, basically.

A plain-vanilla U.S. bond index fund like the Vanguard Total Bond Market exchange-traded fund pays 4.7%, or a point more than the latest year-over-year reading on inflation. Policy makers this past week left rates unchanged but held open the possibility of another hike, and indicated that they expect rates to remain above prepandemic levels for years longer. Charles Schwab fixed-income strategist Kathy Jones points out that Treasury yields tend to peak before the last rate hike of the cycle.

Gabriela Santos, global market strategist at J.P. Morgan Asset Management, says this is an excellent time for U.S. stock investors to shift money to overseas markets. Prices are attractive. The iShares MSCI Eurozone ETF traded recently at 12 times this year’s projected earnings, and the iShares MSCI Japan ETF , at 16 times, versus 20 times for the S&P 500 index of U.S. stocks. The U.S.

 

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